Monday, December 17, 2007
Growth & Recession
The total US economy grows and is not in recession. Why then would a November survey by Rasmussen Reports show that 40 percent of respondents believe we are in a recession? Perhaps it is because the total hides the distribution of income. The Center on Budget and Policy Priorities finds that the share of the nation's after-tax income going to the top 1 percent of households hit the highest level on record in 2005. In contrast, the share of national after-tax income going to the middle fifth and bottom fifth of households was the smallest on record. The income of the bottom fifth increased five percent from 1979 to 2005, while the top one percent gained 228 percent. The people on the bottom have reason to believe we are in recession.